The President’s recent decision to sign the much-anticipated farm bill in Michigan is a testament to the leading role state farmers play in the nation’s food supply. As a major hub for U.S. food production, it’s now time for Michiganders to focus on another federal policy that has and will continue to affect our food producers and providers — the Renewable Fuel Standard (RFS).

The RFS was created in 2005 with the noble intention of decreasing our reliance on foreign oil through the required blending of first generation biofuels into the U.S. gasoline supply along with the federally-assisted development of advanced biofuels to be introduced into the market by 2011. Unfortunately, the latter never happened despite the countless tax breaks and subsidies provided by the U.S. government, and the many foregone promises from the biofuels industry. Instead, corn-based ethanol continues to fulfill 80 percent of the RFS mandate.

The heavy reliance on ethanol to meet the mandate has diverted corn away from food growth toward fuel production. Beginning in 2010 —for the first time in history— more corn went towards producing fuel than food. By 2012, more than 40 percent of U.S.-grown corn was diverted to ethanol production. The result? Corn prices have more than doubled since the RFS went into effect in 2006, devastating Michigan restaurant owners, farmers and consumers alike.

As corn prices remain artificially inflated due to RFS blending requirements, restaurant costs continue to rise affecting the industry and consumers alike. Corn is a key input into the production of a wide variety of food products, from baked goods to meat production, which means its price greatly affects countless menu items.

The stress the RFS places on corn prices — along with other agricultural commodities like wheat and soybeans– means restaurant owners face higher upfront costs for their food purchases. As it stands, the mandate could add $3.2 billion in food costs to chain restaurants by 2015 if left unchecked according to a recent PricewaterhouseCoopers study. This needless economic burden stands to threaten small business owners keen on creating costumer value, job creation and investment in local economies across Michigan.

Restaurant owners aren’t the only ones feeling economic pressure from the RFS. Michigan’s poultry, livestock and dairy farmers are also threatened by higher corn prices due to the critical importance of corn to animal feed. As feed accounts for 50 to 70 percent of these farmers’ production costs (their single largest input cost), corn prices are the hinge on which many farm futures’ hang.

In 2012 alone, feed prices rose by 32 percent, increasing production costs for food producers throughout Michigan and edging many towards financial ruin. Rising feed prices on account of the RFS could jeopardize the $4.73 billion in economic activity generated by Michigan’s livestock and dairy sector along with the countless jobs these farms support across the state.

Unfortunately, the harm doesn’t stop at our restaurants and farms.
Rising feed and food costs will inevitably trickle down to all consumers. With the price of corn expected to rise up to 27 percent under 2015 RFS blending requirements and restaurant food costs expected to rise by $3 billion by 2022, expect the cost of dinner from the local grocery store or your favorite restaurant to reflect those increases.

Fortunately, the EPA recently proposed to reduce 2014 biofuel blending requirements to avert issues associated with increased ethanol in the U.S. gasoline supply. Although this is a step in the right direction, it is no long-term remedy toward permanently preventing the economic harm the RFS causes Michigan’s restaurant industry, food producers and consumers who will continue to face higher food and feed costs.

It’s my hope that Michigan’s federal representatives led by Rep. Fred Upton (R-MI) will lead the charge to reform the RFS in the 2014 Congressional session in order to bolster our industries, state and national welfare.

Do you have a guest column on a statewide topic to share? Email statewide community engagement director Jen Eyer at jeyer@mlive.com.